History of Economic Thought // Spring 2025
marcio.santetti@emerson.edu
Heilbroner’s remaining causes for the transition to the market system:
Rise of the nation-state;
Increase in scientific curiosity;
Emergence of money and markets.
New levels of economic & political power.
The leading nations:
Spain;
Portugal.
The new dominant activities?
Done by?
Sponsored by?
Political consequence?
Austria above all (1684)
Phillip von Hornick (1638—1712)
Nine rules:
An early stage of capitalism
16th—18th centuries
A loose system of ideas
Symbiosis between State and business
A conscious effort to commercialize society
Two questions:
[1] How to grow a country’s national power?
[2] How do you accumulate treasure?
Trade as a zero-sum game
What is a consequence of this view for economic policy?
However…
Demand-pull inflation.
Who were its proponents?
Pamphletary character
Policy-focused
Thomas Mun (1571—1641)
“Although a Kingdom may be enriched by gifts received, or by purchase taken from some other Nations, yet these are things uncertain and of small consideration. The ordinary means therefore to encrease our wealth and treasure is by Forraign Trade, wherein wee must ever observe this rule: to sell more to strangers yearly than wee consume of theirs in value” (ch. 2)
Granting of monopolies
Rise of a new social class
Consequence: Merchants become entrepreneurs.
Parliament vs. Crown
The focal point of the conflict between Parliament and the Crown in the struggle to supply monopoly rights concerned patents. Parliament wanted to restrain the unlimited power of the crown to grant monopoly privileges. The struggle was not over free trade versus government control but rather over who would have the power to supply economic regulations.” (Ekelund and Hebert, 2016, p. 63)
Rise of liberal thought